MMK Offered of a 10 Percent Increase in Wages Notified to Turkish Labor Union Has Expired

Russian steelmaker MMK's Turkey-based subsidiary MMK Metalurji has announced that its offer of a 10 percent increase in wages notified to Turkish labor union Çelik-İş has expired as of August 2.
 
After the labor union turned down 18 percent and 10 percent wage increase offers, "although the negotiations are still going on MMK Metalurji understands that the labor union does not intend to come to a mutually acceptable agreement," the company statement reads.
 
When the parties failed to reach an agreement on wage increases, a strike decision came into effect at MMK Metalurji on July 19.
 
MMK Metalurji said that it is considering imposing a lockout, adding that options regarding an alternative future for its Turkish investment are being sought. In response to a SteelOrbis query about the possible implications of this "alternative future", MMK Metalurji said no further details can be provided at this moment. However, market sources state that MMK is keeping the option of a sell-off on the agenda for MMK Metalurji.
 
In November 2012, MMK Metalurji halted crude steel and hot rolled steel sheet production due to higher raw material costs and the demand contraction in the market. The company has never achieved its nameplate crude steel capacity of 2.5 million mt since it began operating in Turkey. The company has reported zero crude steel output for the second quarter and the first half of the current year, while its finished steel output decreased by 35.7 percent year on year to 346,000 mt in the first half, due to annual repair works at its galvanizing line.
 
In February last year, when there were rumors that Turkey's Tosyalı Holding was holding talks with MMK Metalurji regarding the acquisition of at least a 49 percent stake in MMK Metalurji, the parties involved did not provide any clarification on the issue.
 
Russian MMK acquired 50 percent of MMK Metalurji for $485 million in March 2011, bringing its shareholding to 100 percent. MMK Metalurji was established in 2007 as a joint venture between MMK and Turkish investor Atakaş Group, under the name of MMK - Atakaş Metalurji San. Tic ve Liman İşletmeciliği A.Ş.